Apple iPhone 6 Screen Glitch Leaves Supply Chain Scrambling

Suppliers to Apple are scrambling to get enough iPhone 6 screens ready as the need to redesign a key component disrupted the panel productions mid last week. The issue highlights the risks and challenges that suppliers face to meet Apple’s tough specifications. It is yet unclear whether the hiccup could delay the launch or limit the iPhone 6 initial availability to consumers as Apple readies larger-screen iPhones for the year-end shopping season amid market share loss to cheaper rivals.

Apple is known to make tough demands on its parts suppliers for new iPhones and iPads in the fiercely competitive gadget market highlighting the danger for suppliers of depending too heavily on Apple for revenues and creating earnings volatility.

Japan Display Inc., Sharp Corp., and South Korea’s LG Display Co Ltd. have been selected to make the iPhone 6 screens. Apple will contribute more than a third of the Japan Display’s total revenue in the year to March 2015.

In Taiwan, home to several Apple suppliers and assemblers, export orders grew less than expected in July, even as factories rushed output ahead of new smartphone launches, reflecting the erratic nature of the business. “Currently, there’s a small shortage in supply of a specialized component for our communication devices (however) this kind of problem regularly occurs and the impact on production is negligible” concluded a spokesperson.

The pressure on Apple for stand-out products has increased as Samsung Electronics Co. and, more recently, a clutch of aggressive, lower-cost Chinese producers such as Xiaomi Inc and Lenovo Group Ltd. have eroded the U.S. company’s market dominance.

Thanks for the info, John. Indeed, this is a critical time for Apple. A time when they must determine if they are still innovative enough to hold onto their legendary desirability of the smartphone and tech industry.